Chicago | Reuters — Chicago Mercantile Exchange live cattle turned lower, pressured by profit-taking and uncertainty regarding this week’s slaughter-ready or cash prices, traders said.
Bullish participants see packers paying steady to higher money for cattle to be delivered during the first full slaughter week after the Easter holiday. They also cited possible beef cutout stability.
Market bears point to poor packer margins and the seasonal bump in cattle numbers as reasons for potential cash price pressure.
Last week, cash cattle in Texas and Kansas moved at $147 per hundredweight (cwt), and at mostly $150 in Nebraska, feedlot sources said.
Tuesday morning’s wholesale choice beef price gained 95 cents/cwt from Monday to $223.47. Select cuts jumped $2.03 to $214.08, based on U.S. Department of Agriculture data.
Beef packer margins for Tuesday were an estimated negative $121.80 per head, compared with a negative $139.90 on Monday and a negative $110.70 a week ago, as calculated by Colorado-based analytics firm HedgersEdge.com.
Fund liquidation and sell stops ensued after June futures drifted below the 10-day and 40-day moving averages of 135.884 cents and 135.715 cents
April live cattle closed down 0.075 cent/lb. to 145.275 cents, and June ended 0.475 cent lower at 135.425 cents.
CME feeder cattle felt pressure from live cattle market weakness and profit-taking after recent spikes to new highs.
April, which will expire on April 17, closed 0.775 cent/lb. lower at 179.225 cents. May finished down 0.65 cent, to 179.775 cents.
Most hog futures bow to profit-taking
Hog contracts at the CME settled mostly weak, eventually weighed by profit-taking and pre-Easter weekend cash price jitters, traders said.
Investors pocketed profits for a third straight session, led by generally lower prices for market-ready hogs and Tuesday’s pork cutout rollback.
USDA’s morning direct hog prices were unavailable. Hog prices in the Midwest Tuesday morning traded steady to $1/cwt lower, hog dealers said.
The morning’s wholesale pork price, or cutout, fell $1.66/cwt from Monday to $122.75, USDA said.
Processors will need fewer hogs with many packing plants already cutting back production due reduced supplies pegged to the deadly Porcine Epidemic Diarrhea virus.
A few packers are expected give employees off Easter Monday, thereby limiting their need for hogs, traders and hog dealers said.
Expectations that cash hog and wholesale pork prices could strengthen after Easter periodically lifted CME hogs, traders said.
They said speculative buyers at times targeted futures’ bullish discount to CME’s hog index at 125.55 cents.
May hogs settled down 0.175 cent/lb. to 121.5 cents. Most-actively traded June ended at 122.525 cents, down 0.125 cent, but July closed up 0.475 cent to 119.975 cents.
— Theopolis Waters reports on livestock futures markets for Reuters from Chicago.